Home / Business / As final fine decision looms, BP argues for $2 billion cap

As final fine decision looms, BP argues for $2 billion cap

April 28, 2015

Marissa Hall | Energy Media Group

In the immediate months after the Deepwater Horizon accident in 2010, BP maintained that it would take responsibility for the incident and pay whatever fines came with it. Now, however, that doesn’t seem to ring true for the company. In its final filing with the federal court, BP argued that any fine greater than $2 billion—just 15 percent of the possible fines—would be excessive and would cripple the company’s U.S. exploration and production unit, BP Exploration & Production (BPXP).

The filing was submitted Friday and is BP’s last opportunity to convince U.S. District Judge Carl Barbier to render a smaller fine under the Clean Water Act, according to FuelFix. In its defense, BP asserted that the $27.5 billion paid out in clean-up costs, claims and research grants has eliminated the need for a higher penalty. The company also claimed that its U.S. unit was worth a mere $5 billion, rendering it incapable of paying any exorbitant fines.

In the filing, the company argued, “Reducing the penalty against a violator that has less capacity to pay because of its proactive and beneficial spending on spill response is an entirely appropriate and just outcome contemplated by the (Clean Water Act) statute.”

However, many on the Gulf Coast have been reflecting recently on just how beneficial BP’s response was. Numerous accounts of ongoing claims with no end in sight, inefficient claims systems, continued negative impacts on public health and a myriad of other issues have the public concerned about the state of the Gulf five years after the catastrophe.

The federal prosecutors would also have none of BP’s claims that the company deserved nothing more than a $2 billion fine. According to FuelFix, representatives argued that, at the very least, Judge Barbier should issue a $12 billion fine. The prosecutors also dismantled BP’s argument that its U.S. unit was incapable of paying fines, arguing that its assets amounted to $25 billion and noting that it was within the judge’s rights to consider BP’s collective global assets when deciding how much it should pay.

Last year, Judge Barbier ruled that BP was “grossly negligent” in the events surrounding the Gulf spill. As a result, BP could pay as much as $4,300 for each of the barrels of oil spilled from the Macondo well. BP has already received a break from the judge, who ruled that BP would be accountable for 3.19 million barrels of oil, settling squarely between the government’s estimate of 4.19 million barrels and BP’s estimate of 2.45 million barrels. The reduction capped potential fines at $13.7 million rather than almost $18 billion.

Judge Barbier hasn’t seem impressed by BP’s antics, either. The judge issued an order Monday regarding the Back-End-Litigation-Option for the medical settlements in the aftermath of the Deepwater Horizon disaster. Judge Barbier took the opportunity to reprimand BP for “misquoting cases to the court” in one of the company’s submitted documents on the matter.

In the order’s conclusion, Judge Barbier ruled that BP’s motion to strike the plaintiff’s demand for a jury trial has been denied. The full ruling can be found here.

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